Press release 02/09/1998 00:00 CET

An increase in profit before tax and a strong order book were announced by Kvaerner Construction today (2nd September) when it released its figures for the first six months of this year to 30th June 1998.

Profit before tax amounted to £8 million (1997: £ 0.4 million) prior to internal adjustments relating to goodwill. Kvaerner Construction’s turnover has increased by 25% to £488 million (1997: £392 million) .

The order book, including associates, at the end of June this year of £1.8 billion represents an increase of 13% on the order backlog as at close of 1997. Order intake is 28% up over the comparable period in 1997.

Commenting, Keith Clarke, chief executive, said: "We have had an excellent start to this financial year and these results reflect that position. Both the quality and quantity of our order book is strong and increased efficiency has increased our profit which has allowed investment for future growth."

Strong performances in Construction came from its UK Civils operation while the UK Building operation has recently benefited from major awards particularly in the area of design and build work such as the prison market which Kvaerner now dominates.

Internationally Kvaerner Construction has a strengthening presence in Egypt with two major contracts won this year. In India the associate company Kvaerner Cementation India has been recapitalised. Kvaerner’s shareholding has been increased to 64%. The company has a strong order book of £79 million and has recently had some major successes on infrastructure projects.

In its steel sector, Kvaerner Cleveland Bridge is increasing its presence in Dubai where it is building a new fabrication facility to increase product lines supporting the continued growth in prosperity from the area. In Malaysia the company has taken 100% ownership of its fabrication facility as a long-term investment focused on export markets.

Kvaerner Water has continued to consolidate its activities. It has disposed of its loss making businesses and has won a number of good contracts this year.

In the Specialist Businesses sector mechanical and electrical subsidiary, Kvaerner Rashleigh Weatherfoil, has produced a strong performance as have Clark and Fenn, ceiling specialists, and Richard Lees Steel Decking. The mining business has continued its successful refocus from UK coal mining to international mine development and tunnelling.

Strengthened management has enabled action to be taken that is resulting in two businesses previously in difficulty, Trollope Colls Elliott, the specialist joinery company, and the U.S. subsidiary, Kvaerner Construction Inc., turning towards profitability.

The financial instability in Asia continues to affect our operations in those markets. However, Gammon is still benefiting from a very strong order book and prospects in the public sector for both civil engineering and building remain buoyant. The private sector is now depressed.


For further information contact:

Cheryl Eaton - 01923 423 030